Question

Terell jackson opened a savings account by depositing his $1,050 paycheck his bank pays 12% interest compound a monthly basis he doesn't make any other deposits or withdrawals after three years how much interest will he earn

Answer 1

Interest= $516.93

Explanation:

Giving the following information:

Initial investment (PV)= $1,200

Number of periods (n)= 12*3= 36 months

Interest rate (i)= 0.12/12 = 0.01 monthly

First, we need to calculate the future value of the investment using the following formula:

FV= PV*(1 + i)^n

FV= 1,200*(1.01^36)

FV= $1,716.93

Now, the interest earned:

Interest= 1,716.93 - 1,200

Interest= $516.93